Preview: Lone Star State Moves Up The Rankings In CRN 'Best States' Research

For entrepreneurs thinking about starting a solution provider business, Texas is an increasingly attractive state to consider.

This year the Lone Star State ranked No. 7 on CRN's annual Best States to Start a Solution Provider Business analysis. That's up from No. 11 in last year's analysis.

The Best States to Start a Solution Provider Business examines the 50 states according to a broad range of criteria that entrepreneurs and solution provider startups consider critical to their potential success. The study, for example, scores each state on labor and employment costs, the available pool of educated and experienced workers, taxes and regulations, the potential for innovation and growth, and business opportunity factors such as economic diversity and access to capital.

The complete Best States ranking will be published on Sept. 8 exclusively on the CRN Tech News App.

"Texas has been awesome in the last couple of years. And it seems the prospects just keep getting better," said Christopher Alghini, president of Coolhead Tech, an Austin-based, cloud computing-focused solution provider. Launched in 2008, Coolhead offers a range of cloud computing and managed services built around Google Apps and the HubSpot online marketing application.

The CRN analysis backs that up: Texas ranked No. 1 for overall business opportunity, including top scores for its roaring economy, the large number of startups and fast-growing companies, easy access to capital, and other economic and business benchmarks.

The business opportunity score even considers such factors as the availability of broadband telecommunications. The state overall ranks a low No. 41 there, but cities such as Austin are an exception. "We're already a pretty well-wired community, Alghini said, noting the availability of gigabit fiber networks and a Google Fiber project on the way.

"Our business community is thriving," said Neal Juern, president of Juern Technology, a San Antonio-based solution provider that provides managed services, including help desk and backup and recovery, and cloud computing services. "There's always more potential clients," he said – so many that Juern Technology largely sticks to serving small and midsize companies with between 10 and 50 employees.

Much of the state's growth is being driven by the booming oil business, said Juern, with the thriving real estate business also spurring the economy. Juern even has two customers in the health-care arena for the solution provider's HIPAA services. "That's a brand-new area for us and it appears to have unlimited potential," Juern said in an interview, conducted on his mobile phone while he was in the process of moving his growing company to bigger office space.

Texas' overall showing among the states also gets a boost from its No. 8 ranking for innovation and growth, a category of criteria that includes data about a state's real gross product, the number of employed scientists and engineers in the state, the number of information technology jobs, patents granted to Texas residents, and entrepreneurial activity.

The availability of an experienced, educated labor pool that IT startups can tap into is another major factor in a state's overall rankings and here Texas was likely pulled down by its No. 39 showing in that criteria.

But solution providers say that's not a problem in Austin, home to the University of Texas and Austin Community College, which crank out educated graduates that local startups can hire. ACC has converted a former mall into its Highland Campus, scheduled to open this fall with a capacity of 6,000 students, and the facility "ACCelerator" learning lab.

The CRN Best States analysis also looks at a state's cost of living and other "quality of life" criteria. Here Texas (No. 13 in overall personal cost of living) benefits from its lack of a personal income tax.

Alghini moved from San Diego, in part, to escape that city's high housing costs. Austin is a fun city with much of the same cool factor, he says, and he worries that CRN's Best States stories could spoil things by attracting too many people. "We try not to spread the word around too much," he quipped.